SBCI Launches Future Growth Loan Fund

SBCI Launches Future Growth Loan Fund

Loans under €500,000 are unsecured

The government has launched a new funding scheme which will make €300m available to farmers and SMEs to support strategic investment after Brexit.

Small and medium enterprises and farmers can apply for loans of up to €3m under the terms of the Future Growth Loan Scheme, with at least 40% of the fund earmarked for agri-food enterprises.

Loans up to €250,00 will have an interest rate of 4.5% and larger loans 3.5%. Loan terms of up to ten years will be available and the Future Growth Loan Scheme is being administered by the Strategic Banking Corporation of Ireland.

The idea is that the scheme will provide affordable financing to businesses, and the primary agriculture and seafood sectors, to support strategic long-term investment in a post Brexit environment.

AIB, Bank of Ireland and KBC are participating and negotiations continue with another two lenders.

Business minister Heather Humphreys commented: “With Brexit on the horizon, investment in innovation and diversification has never been more important. For this reason, I would strongly encourage businesses to started putting their proposals together now so that they are ready to start the application process with the SBCI.”

The Exchequer’s contribution of €62m to the loan fund has been backed by the European Investment Fund in such a way as to leverage the scheme to provide €300m.

From April 17, applications for eligibility under the scheme can be made through the SBCI website. The SBCI will assess the applications and those successful will be issued an eligibility reference number which they can use to apply for a loan.

The main features are:

Loan amount from €100,000 (€50,000 for primary agriculture) up to a maximum of €3m

Loan term from a minimum of 8 years to a maximum of 10 years

Loans less than €500,000 will be unsecured

Interest rate of 4.5% for loans up to €250,000 and 3.5% or less for loans of €250,000 or more

Use for: Investment in tangible or intangible assets for the purpose of process and organisational innovation

Use for: Investment in tangible and intangible assets on agricultural holdings linked to primary agricultural production.

Agriculture minister Michael Creed said the Scheme is a welcome source of finance for young and new entrant farmers, especially the cohort who do not have high levels of security.

“It will also serve smaller-scale farmers, who often do not have the leverage to negotiate for more favourable terms with their banking institution. Along with products such as Milk Flex, this Scheme will form part of a comprehensive investment package for farmers. I am also delighted to be able to include the seafood sector in the scheme,” Creed stated.

“Food companies have identified long term investment finance of up to ten years as a critical need which is currently unavailable in Ireland. I am pleased that the government has been able to deliver this product and its effects will be felt all along the food production chain from primary producer to processor.”

Finance minister Paschal Donohoe noted that it is not currently possible for SMEs to access loans of more than seven years. “This Scheme which offers loans of between 8 and 10 years is a very positive development,” he said

SBCI chief executive Nick Ashmore (pictured) said the Scheme will provide support to enable eligible businesses and farmers investing for the long term to innovate, digitalise, find new markets, and to grow into the future. “The FGLS is another example of the SBCI supporting the government in the delivery of vital relevant supports for businesses in Ireland,” Ashmore added.

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